Airbnb Continues its Recovery from Covid-19
The tourism industry suffered tremendous losses due to the Covid-19 pandemic. Airbnb also had to tackle various issues created by the Covid-19. The company from San Francisco reported strong third-quarter profit growth and a beat on revenue estimates on Thursday. Airbnb continues its recovery from Covid-19 and travel returns as vaccination efforts ramp up all over the world.
On Thursday, its shares briefly rose more than 3% in after-hours trading before paring gains. The company founded by Brian Chesky and Joe Gebbia in 2008 reported 79.7 million nights as well as experiences booked in the third quarter. Importantly, that was still up 29% year over year, when Covid-19 devastated the travel industry.
Airbnb also saw its highest-ever revenue and net income in the third quarter. It reached great results even though urban and cross-border travel have not returned to pre-pandemic levels. The company’s revenue came in at $2.24 billion, up 67% year over year. Net income jumped 280% to $834 million on a year-over-year basis.
It expects revenue between $1.39 billion and $1.48 billion in the last quarter of the year.
Airbnb and main findings
Airbnb in its third-quarter letter to shareholders mentioned many interesting details. According to the company, recovery trends continue to differ from region to region. It also highlighted two important factors that vary regionally: travel restrictions as well as vaccination rates.
Nevertheless, the company added that it is “uniquely positioned for this travel revolution”. For instance, in North America, nights and experiences jumped 10% from the same quarter in 2019.
The world-famous company previously reported in its second-quarter letter to shareholders that it expected the Covid delta variant to influence travel behavior. Airbnb also expected the delta variant to make year-over-year comparisons for nights and experiences booked and gross booking value more volatile and non-linear.
Gross booking value is quite important for the company. It uses gross booking value to track host earnings, service fees, cleaning fees, and taxes. In the third quarter, gross booking value was $11.89 billion. That result was up about 48% year over year but fell slightly below a StreetAccount forecast of $12.31 billion. Average daily rates for Airbnb fell to $149 from roughly $161 in the second quarter.
Airbnb expects a strong fourth quarter and for travel demand to extend into 2022. The company also expects nights and experiences booked for the last quarter of 2021 to outperform the same period last year.
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